e.l.f. Beauty, Inc. (NYSE:ELF) Q1 2023 Earnings Conference Call August 3, 2022 5:00 PM ET
Company Participants
Tarang Amin - Chairman, CEO
Mandy Fields - SVP, CFO
KC Katten - VP of Corporate Development & IR
Conference Call Participants
Dara Mohsenian - Morgan Stanley
Olivia Tong - Raymond James
Steph Wissink - Jefferies
Linda Bolton-Weiser - D.A. Davidson
Bill Chappell - Truist Securities
Rupesh Parikh - Oppenhimer
Mark Astrachan - Stifel
Korinne Wolfmeyer - Piper Sandler
KC Katten
Thank you for joining us today to discuss e.l.f. Beauty’s, First Quarter Fiscal ‘23 Results. I’m KC Katten, Vice President of Corporate Development & Investor Relations. With me today are Tarang Amin, Chairman and Chief Executive Officer; and Mandy Fields, Senior Vice President and Chief Financial Officer.
We encourage you to tune into our webcast presentation for the best viewing experience, which you can access on our website at investor.elfbeauty.com. Since many of our remarks today contain forward-looking statements, please refer to our earnings release and reports filed with the SEC, where you’ll find factors that could cause actual results to differ materially from these forward-looking statements.
In addition, the company’s presentation today includes information presented on a non-GAAP basis. Our earnings release contains reconciliations of the differences between the non-GAAP presentation and the most directly comparable GAAP measure.
With that, let me turn the webcast over to Tarang.
Tarang Amin
Thank you, KC, and good afternoon everyone. Today, we will discuss the drivers of our Q1 results and our raised outlook for fiscal ‘23. I want to start by recognizing the e.l.f. Beauty team. We’re off to a strong start in our new fiscal year delivering Q1 results well ahead of expectations. Q1 marked our 14th consecutive quarter of net sales growth. We grew net sales by 26%, increase gross margin by 390 basis points and delivered $32 million in adjusted EBITDA up 46%. Given our momentum, we’re raising our full year guidance.
Color Cosmetics category trends remain positive in Q1 up 4% year-over-year fueled by an increase in usage occasions and innovation. Q1 was the first full quarter of growth above pre-pandemic levels. e.l.f. cosmetic consumption and Q1 was even stronger, up 27% well above category growth rates. We were the fastest growing top five brand by a wide margin, growing our market share by 120 basis points.
Looking ahead, the environment continues to be dynamic. While it’s difficult to forecast how inflation or recession may impact consumer behavior, we believe cosmetic continues to be an important category for self expression. Mass cosmetics in particular has performed better than prestige in past recessionary times. More importantly, we’re confident in our business model and ability to continue to gain share.